Criteria for selecting a manufacturer
There can be various evaluation points that you could use in your selection decision. The ones that you use or the amount how much they weigh depends on the objectives of the project and what is important to your business. Cost, however, is a significant aspect in your choice and it is a key differentiator if you have equally qualified manufacturing prospects, but it doesn’t need to be the only one. An important factor in the process also is the cultural fit, which is often not considered part of the evaluation criteria. The volume of your project will also determine how you weigh your criteria. After you have shortlisted candidates according to their technical abilities, certifications, location and experiences, the following contract manufacturing selection criteria are for you to consider: Corporate stability:
Does the product manufacturer provide a solid business environment? Are they a well-established company with the means to take on your company’s job? Service offerings:
Does the manufacturer provide the services detailed in your requirements? Is he able to complement with further services that can be helpful for your business? Culture
: Does the manufacturer share your values and are its strategic goals in line with yours? Do they view quality and cost aspects the same way your business does? Does the manufacturer have a culture committed to continuous improvement? Customer satisfaction
: Will the manufacturer be able to maintain current levels of service and even seek and use input from you and your customers to improve level of service? Operations
: Does the manufacturer use appropriate methods, resources and processes to assure operational efficiency and effectiveness? Does he have procedures in place that protect against equipment breakdown and malfunction? Is the provider committed to continuous improvement? Timely delivery of inbound and outbound goods is vital for the manufacturing processes. The contract manufacturer should be able to realize the fact that on-time delivery is crucial for your success. Technology
: Does the candidate use technology effectively to operate its business? Does it have access to world-class technology? Reach
: Can the manufacturer meet global and local requirements? As a future partner, a contract manufacturer should have a reliable and efficient global supply chain to reach its suppliers and customers alike. Its validated suppliers’ network should be able to provide the best available pure material at realistic prices not to affect your profit margins. Cost:
Does the manufacturer’s bid contain all requested points with the necessary degree of detail? Will the prospect make a profit that is fair? How is the offer compared to others of equal capability? Remember price and quality often go in proportion, so keep the price as a secondary factor. Price is only a fraction of the whole equation. If you do not want to compromise on quality then your contract manufacturer should come ahead with better manufacturing solutions to maintain quality without compromising on quality. Flexibility
: Does the potential manufacturer operate its company so that it can change with your needs and the needs of your customers? Is the manufacturer willing to make adjustments if necessary? If you have to make distinctive changes, will the candidate be able to adjust? Control systems
: Does the manufacturer’s information system allow the exchange of a broad variety of information securely? What will it take to integrate its systems with yours? Training:
The top contract manufacturers keep their teams and staff up to date in regulatory training to provide you workforce that best understands the current regulatory and best practices regime. The regulatory knowledge of your partner makes you confident about meeting regulatory requirements. A trained workforce at the contract manufacturer’s facility provides you with the edge over average manufacturers. If the contract manufacturer has a technically qualified workforce, quality assurance would not be a problem. It may be helpful to create a matrix or scoreboard to use in your evaluation. Using this assessment criteria may be a good way to assure that there is a good fit between you and your manufacturer, one that most likely will lead to a harmonious, beneficial relationship.
Choose the right fit
In the evaluation process, how the potential provider’s company culture compares to yours is important. High success rates involve two companies whose cultures match. When there is a solid cultural fit between an outsourcer and a manufacturing provider, communication flows and critical challenges are met and overcome. However, cultural fit is difficult to measure and surely subjective. Are they open with you when they answer your questions? Are their reactions natural rather than forced? If you have the chance try to talk to different company leaders or employees of the manufacturer. Do they seem to enjoy what they are doing? Do they present substantial knowledge of the work flows? Are they experts or do they demonstrate a high degree of experience? Contact at least three product manufacturers more thoroughly to obtain insights into their performance. By combining your experiences in direct conversations with company representatives you will have multiple data points for determining whether the company fits to your business. If appropriate, go visit their site and view their performance first hand. Then, if their attitude and ideas is matching with yours, very probably you will have a solid candidate for your final selection. Until a contractual business partnership is established, you should always preserve more than one provider option. Therefore, you should not tell any potential manufacturer that they will be chosen until a term sheet or contract is signed. After you have made your choice, remember to thank other participants that did not make it to the final point. It is recommended to share why they were not the best match this time. There also may be a next time were another opportunity appears.